Every marketing campaign is unique and therefore requires a unique tracking strategy. With too many entrepreneurs relying solely on their gut instinct alone, you risk overlooking something important and missing valuable insights for future campaigns.
That's why it's vital to track purchase frequency and cart size.
But, which one should you focus on? More so since both are vital to assess your business's health, conversion rates, customer engagement, and loyalty.
It's quite the predicament.
To help you decide where to focus more, let's first break down these two metrics into bite-size chunks to help you understand better. By the end, you'll decide which metric is best.
Purchase frequency represents the number of times the average consumer purchases your brand's goods and services in a given period (in most cases, a 12 month period).
Purchase Frequency = Total number of orders (12 months) / Total number of unique customers (12 months)
By understanding how often a customer(s) buys from your brand, you'll be able to gauge customer engagement.
It's common for consumer packaged goods (CPG), such as a gallon of milk, to have a higher purchase frequency than goods outside the CPG category, such as machinery.
Why is it important to monitor your online brand's purchase frequency?
Calculating your purchase frequency will assess your overall customer retention with more than 50% of your annual revenue coming from repeat purchasers.
Additionally, with the consumer behavior data you collect, you can boost consumer loyalty, motivating customers to spend more increasing their CLV.
There's no one answer for all that showcases a good purchase frequency across the board.
Frequency purchase varies from industry to industry. However, according to Alex Schultz, vice president of growth at Facebook, a 20 – 30% purchase frequency is a great indicator your online store is healthy.
While it's great to have a high purchase frequency, say 50%, it's best to invest in new customer acquisition strategies to widen your consumer.
On the other hand, if only 20% of your customers or lower become repeat purchasers, consider re-targeting the one-time customers to motivate them to convert to repeat purchasers.
Cart size is the number of products a customer purchases from your brand per transaction over a given period.
Cart Size = Total number of products(units) sold / Number of order transactions
You have invested in marketing campaigns, attracted customers to your store, converted them into purchasers, and now, it's time to measure how satisfied they leave your store.
So, why is cart size important to your brand?
It's vital to create segments to boost personalization and reduce cart abandonment through sending cart abandonment emails.
What Is The Preferred Cart Size?
Again, there isn't a one size fits all cart size. Various factors determine the number of products a customer purchases at that given time, such as:
You are in business to convert leads into purchasers to generate revenue.
Cart size comes down to one thing: customer experience.
The more a customer is satisfied, the larger the cart size and the more profits you'll make. An improved customer experience begins with making the right first impression, and you have a few seconds to make or break it.
Choosing the right metric should ultimately depend on the nature of your business, your company's growth, your business objectives, and the types of products you're selling. Take some time to think about what will be most beneficial for your business and how you can best incorporate it into your marketing strategy. And if you want more insight into which metrics are best for your business, Glow Loyalty has all the support you need. Contact us today-- our experts are ready to help.
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